A representative of CBRE recently reported that by disrupting the way employees commute to work, autonomous vehicles (AVs) are expected to fundamentally reshape the U.S. office market by 2030, according to report from CBRE. The rep also says the importance geographic location and access to talent —which typically have been among the main drivers of CRE — may decrease as the importance placed on the workplace experience and building amenities grows.
In addition, while the Greater Los Angeles area — due to its mild weather and extensive car-focused infrastructure — could be among the first places in the U.S. to see a more targeted rollout of self-driving vehicles, according to the report, the Inland Empire also stands to benefit. The report indicates that in Downtown L.A., the advent of AVs would further diminish the need for parking structures since this part of town is quite walkable, and the Inland Empire’s easy and robust infrastructure stands to benefit as well.
Andrea Cross, head of office research, Americas, for CBRE, and one of the authors of the report, tells SoCal Real Estate, “The Inland Empire’s temperate climate and relatively straightforward roadways make it more easily navigable by AVs than places with harsher weather conditions and/or complex street layouts, such as New York, Boston, and San Francisco.”
Cross also says that AVs may make people more willing to travel long distances to work because they can use the time in other ways, such as working, sleeping, or reading, and that AVs also may reduce the premium that many tenants currently are willing to pay for buildings located near public transit.
“A market like the Inland Empire that does not have an extensive mass transit system and offers relatively inexpensive office space compared with adjacent markets like Los Angeles and Orange County could benefit from more employees being willing to commute there,” Cross says. “If location becomes less important, the desirability of the work environment, including the amenities offered, will increase in relative importance. Owners should focus on creating the most appealing environment they can, as it will help them attract tenants today and position them well for the arrival of AVs in the future.”